Small is Beautiful? Exploring the Challenges Faced by Trade Union Supported Credit Unions

The consequences of the financial crisis and successive UK governments’ austerity programmes include the growth of precarious employment, in-work poverty, and financial exclusion. Credit unions have been identified as a solution to the problem of accessible and affordable credit and increasingly trade unions have adopted policies to support their development. This paper explores the structure, regulation, and competence of credit unions and also examines the problems trade unions face in promoting credit unions to their membership. Based upon exploratory research into three distinctive types of credit union, it is argued there are significant barriers to providing accessible and affordable credit, reflecting the small scale and limited resources of credit unions. Trade unions’ relationships with credit unions also need consideration, since differences in union strategies, structures, and membership composition affect the demand for credit union services and the scope for trade union involvement. A final question raised by the research is the extent to which trade unions are capable of operating credit unions, particularly in relation to conducting enforcement actions against members over non-payment. It is proposed that further research into credit unions and their relationship with trade unions is required, if substantive steps toward financial inclusion are to be achieved.